What is an income statement waterfall?

An income statement waterfall is a bar chart that walks from total revenue down to net income, with each step showing how much a cost or tax line removes (or adds). Subtotals — gross profit, operating income, pre-tax income — are anchored to zero so the cascade reconciles exactly to the bottom line.

How much of McGrath RentCorp (MGRC) revenue becomes net income?

For TTM through Q1 2026, McGrath RentCorp turned $947M of revenue into $155M of net income — a net margin of 16.4%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are McGrath RentCorp (MGRC) gross, operating, and net margins?

For TTM through Q1 2026, McGrath RentCorp reported a gross margin of 45.9%, an operating margin of 25.5%, and a net margin of 16.4%. Each subtotal in the waterfall corresponds to one of these margins.

Why does McGrath RentCorp (MGRC) have such a high (or low) gross margin?

Gross margin (gross profit ÷ revenue) reflects how much of each revenue dollar remains after direct production costs. Capital-light software and platform businesses often show gross margins above 60–80% because their cost of revenue is mainly hosting and support. Hardware, retail, and commodity businesses show lower gross margins because raw materials and manufacturing costs are significant. The waterfall makes this visible at a glance — the size of the "Cost of Revenue" bar relative to Revenue is the gross margin complement.

What is the difference between gross, operating, and net margin?

Gross margin = (Revenue − Cost of Revenue) ÷ Revenue. It measures production efficiency. Operating margin = Operating Income ÷ Revenue. It adds operating expenses (R&D, S&M, G&A) and measures the profitability of core operations. Net margin = Net Income ÷ Revenue. It also includes interest, other income/expense, and taxes, and represents the shareholder take after everything.

McGrath RentCorp (MGRC) Income Statement Waterfall

Revenue

$947M

Gross Margin

+45.9%

Operating Margin

+25.5%

Net Margin

+16.4%

Income statement waterfall for McGrath RentCorp (MGRC) — TTM through Q1 2026

Net income: $155M

Margin breakdown for McGrath RentCorp (MGRC) — TTM through Q1 2026

Line item	Amount	Running total
Revenue	$947M	$947M
Cost of Revenue	-$512M	$435M
Gross Profit	$435M	$435M
Operating Expenses	-$193M	$242M
Operating Income	$242M	$242M
Other Income / Expense	-$29.3M	$213M
Pre-tax Income	$213M	$213M
Income Tax	-$57.4M	$155M
Net Income	$155M	$155M

Revenue$947M
Cost of Revenue-$512M
Gross Profit$435M
Operating Expenses-$193M
Operating Income$242M
Other Income / Expense-$29.3M
Pre-tax Income$213M
Income Tax-$57.4M
Net Income$155M

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